Contracts: authority
A practice note that explains the English common law and statutory rules on contractual authority, which determine if a person can enter into an enforceable contract on behalf of another entity. It considers the principle that a contract is only enforceable if the person entering it on another person or organisation's behalf has the requisite authority to do so. It explores the main types of authority, including express and implied actual authority, and apparent (or ostensible) authority. The note considers ratification, a process which allows a principal to retrospectively approve an agent's unauthorised actions, and considers the burden of proof in disputes. It further details the specific rules that apply to various entities, including companies under the Companies Act 2006 (CA 2006), partnerships, limited liability partnerships (LLPs), and charities. It also discusses statutory protections for third parties dealing with these entities in good faith. Finally, the note offers practical tips for minimising the risk of a contract becoming unenforceable due to an agent's lack of authority.
Already a Practical Law customer? Sign in
Get access to this document with Practical Law
The value of Practical Law
Deliver results and stay ahead with the help of Practical Law's built-in network of legal experts
As a legal professional, your time is a precious resource. Whether you need insights on a market-leading precedent, help navigating a new topic, how-to guidance on the law with an integrated drafting note, or a checklist to help mitigate risk, you can rely on Practical Law.
Practical Law is the only legal know-how solution supported by a team of over 650 full-time global editors who obsessively monitor the law and create resources to help you navigate the unknown and practise more efficiently.
Learn more about Practical Law
Make the most of your time and resources
Jumpstart your work
Easy-to-use tools deliver a great starting point, so you spend less time searching for templates, building presentations, or delving into unfamiliar areas.
Get how-to guidance
Practical resources provide you with in-depth expert knowledge and insights to help you work more efficiently and make informed decisions confidently.
Rely on worldwide expertise
We offer global and comparative content with thousands of assets covering critical legal topics in more than 100 countries, including weekly updates and daily alerts for EU Law.